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THE POLITICAL ECONOMY OF DRUG TRAFFICKING

THE POLITICAL ECONOMY OF DRUG TRAFFICKING. INTRODUCTION 1. Pervasiveness of issue 2. Typicality? Or an extreme case? 3. Categorizing “illicit drugs”— Marijuana Heroin Cocaine ATS/designer drugs 4. Note: Dangerous prescription drugs. READING. Smith, Talons , ch. 14

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THE POLITICAL ECONOMY OF DRUG TRAFFICKING

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  1. THE POLITICAL ECONOMY OF DRUG TRAFFICKING INTRODUCTION 1. Pervasiveness of issue 2. Typicality? Or an extreme case? 3. Categorizing “illicit drugs”— Marijuana Heroin Cocaine ATS/designer drugs 4. Note: Dangerous prescription drugs

  2. READING • Smith, Talons, ch. 14 • DFC, Contemporary, chs. 2 and 9 (Mexico + Colombia)

  3. THE GLOBAL MARKET: STRUCTURE AND SCALE 1. Worldwide flows, variations by drug Consumption around the world * 149-272 million users * 15-20 million “addicts” or problem users * $320 billion per year (est.) 3. The U.S. market: magnitudes, profits and costs

  4. Global Production and Trafficking MDMA Amphetamine Type Stimulants Cocaine Heroin Potential Cocaine Production (mt)

  5. Sources of Heroin Metric Tons 5,106 5,082 5,000 4,452 4,263 4,068 3,671 3,441 3,389 3,302 1,264 ONDCP/FEB02 * Values for Latin America are projected

  6. 3 percent Direct to U.S. 43 percent Caribbean Corridor Estimated Cocaine Flows ca. 2000 54 percent Mexico/Central American Corridor

  7. 75 METRIC TONS DETECTED DEPARTING FOR NON-US MARKETS Interdiction of Cocaine, 1999 Arrival Zone Seizures Transit Zone Seizures MEXICO / CENTRAL AMERICAN CORRIDOR -60 MT -37 MT 54% 277 MT 512 Metric Tons Depart South America for U.S. 382 MT Potentially Arrives in the U.S. 43% 220 MT CARIBBEAN CORRIDOR -14 MT -7 MT 3% 15 MT DIRECT TO CONTINENTAL U.S. -12 MT

  8. Cocaine and Heroin Prices: 1981-2010

  9. Cultivation: 2000-2009

  10. Who Are the Winners…? Where are the profits? Price structure of one kilo of pure cocaine, ca. 2000: Coca leaf (e.g., farmgate in Peru) $ 300 Coca base (farmgate) 900 Cocaine hydrochloride (export/Colombia) 1,500 Cocaine hydrochloride (import/Miami) 15,000 Cocaine (67% pure/dealer U.S.) 40,000 Cocaine (67% pure (retail/U.S.)150,000

  11. New survey series* Percent Reporting Past Month Use of Any Illicit Drug Trends in Drug Consumption, 1985-2000 *The survey methodology was changed in 1999. Estimates based on the new survey series are not comparable to previous years. Source: SAMHSA, National Household Survey on Drug Abuse.

  12. U.S. DRUG USERS • 1990 = 13.5 million (6.7%) • 2000 = 14.0 million (6.3%) • 2007 = 19.9 million (̴ 8%) • 2010 = 22.6 million (8.9%)

  13. Usage of Marijuana Percent Reporting Past Month Use of Illicit Drugs, 2000 Only a drug other than marijuana Marijuana only Marijuana and some other drug Source: 2000 National Household Survey on Drug Abuse

  14. Percent Reporting Past Month Use of an Illicit Drug Drug Abuse by Age Cohort Prime example of an aging cohort of drug users -- this group began use in 1970s. Source: 2000 National Household Survey on Drug Abuse

  15. Percent Reporting Use of “Any Illicit Drug” Drug usage among American Students Source: Monitoring the Future Study

  16. Drug Use by Drug Type

  17. U.S. Users Spend $63.2 Billion Annually Consumer Expenditures on Illicit Drugs, 2000 Billions of Dollars (Projections for 1999) Source: ONDCP Paper, What America’s Users Spend on Illegal Drugs

  18. U.S. POLICY: THE DRUG WARS 1. Participants and processes 2. Strategic content: Goal: Reduce illegal drug use and availability Enforcement > education, treatment, thus 2:1 ratio in federal budget Supply control > demand reduction, thus interdiction and eradication Assumption: One policy fits all…. Criteria for evaluation

  19. Fiscal Year 1986 -2003 Dollars, in Billions Composition of Federal Expenditures, 2000

  20. Federal Prisons 145,416 U.S. Prison Population, 1985-2000 Local Jails 621,149 Number of Inmates, in Millions State Prisons 1,236,476 Source: Bureau of Justice Statistics, 2001

  21. Reasons for Drug Arrests, 2000 Source: Uniform Crime Reports, FBI.

  22. IMPLICATIONS FOR LATIN AMERICA 1. Economic costs and benefits 2. Violence (and “drug wars” in multiple forms) 3. Corruption 4. Growth in consumption 5. Threats to governability Challenges to sovereignty—e.g., invasion of Panama 1989 Process of “certification” (now modified)

  23. QUESTIONS OF PUBLIC POLICY: WHAT ARE THE ALTERNATIVES? INTRODUCTION 1. What might be desirable? Or feasible? 2.    What are the prospects?

  24. ARE THERE ALTERNATIVES? 1. Continuation (or acceleration) of current policy: ·        Increased budgets ·        Establish coherence ·        Long-term durability

  25. 2.      Legalization: ·        Regulation, not legalization ·        Decriminalization? ·        Partial or complete?

  26. 3. Changing priorities: ·        Demand reduction > law enforcement ·        Law enforcement = more on money laundering, less on retail pushers ·        Focus on governability as key issue in Latin America ·       Multilateral efforts against consumption and demand, rather than supply ·       What about certification?

  27. ENLIGHTENMENT IN LATIN AMERICA! • Marijuana personal use is decriminalized in : • Argentina • Brazil (depenalized) • Colombia • Costa Rica • Mexico • Peru • Uruguay • Venezuela

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